Nicaragua: Tax Income Increases 29%

The increase far exceeds the government's own expectations and is fueled by revenue collected from taxes on income and value-added sales.

The total collected in September was $1.17 billion, 29% more than the same period of 2010.

"The economist Adolfo Acevedo commented that the growth in tax income continues to exceed the predictions made as part of the Nicaraguan general budget this year, which predicted growth in revenue of 13.8%," reports an article for Laprensa.com.ni.

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Employers indicate that for some companies, the inadequate implementation of an administrative ruling of the Department of Revenue increases costs by 15%.

"Where the provision of services in general and the use or enjoyment of goods is provided by natural or legal persons or an entity, either resident or nonresident, which are not responsible for collecting VAT (IVA in Spanish), the payer of the service shall make a self transfer of the VAT incurred, which constitutes a tax credit under accreditation rules. "

The Directorate General of Revenue (DGI) of Nicaragua raised between January and June 2012 some $603 million, which is 21.15% more than in the same period in 2011.

The total revenue collected exceeded the target set in the General Budget of the Republic by 7% .

"According to research by the Strategic Planning Department of the DGI, the gross proceeds obtained shows a tendency to average annual growth of 21 percent when income from the first half of 2012 is compared to the same period last year.

The period for presented audited financial statements and the income declaration (ISR) expires on March 31 for all registered taxpayers.

According to prensalibre.com, "the law, in effect since the start of the year, covers the 2008 fiscal year.

According to Abelardo Medina, head of operations at SAT, there are proposals for reforming these requirements and to required audited statements only from special contributors; however, these were not approved by Congress hence until the modification are approved, the procedure will be applied to all taxpayers (at a rate of 31%)."